Diabetes mellitus is responsible for 12 percent of health care expenditures in the United States, and much of the cost can be attributed to the treatment of complications. Morbidity, particularly the development of microvascular complications, has been linked to poor glycemic control in type 1 diabetes. Evidence strongly suggests that improved glycemic control may reduce the morbidity, mortality and treatment costs of type II diabetes. To prevent cardiovascular complications, physicians and patients must work together to address risk factors such as dyslipidemia, hypertension and smoking. Effective care of type II diabetes requires an appropriate diet, an exercise program and, if needed, a carefully monitored drug regimen. In addition, physicians and patients need to cooperate in setting goals and making tradeoffs related to the potential benefits and adverse effects of therapy. Individualized patient education and support groups also can be very useful.